[quote=Dust Bunny]

 I don't understand your question.  Do you not use hypothetical illustrations? Is it your idea that I should go and change every client's allocation when I run a new hypothetical illustration of historical performance? 

I promise to meet face to face with my clients at least 3 times a year for indepth portfolio reviews and contact them by phone if/when anything might need our immediate attention. 

What does that have to do with running a historical hypothetical illustration?

[/quote]

That's the nice thing about finding something that works really well and not changing anything....Instead of using hypos, I can show actual client statements.

[quote=AllREIT] [quote=Philo Kvetch]
In answer to your question, I very rarely use mutual funds, so hypos, at
least for me, are a non-issue.[/quote]

I don't even use hypo's. I tell people that past performance isn't very useful except for getting a flawed sense of potential future returns. I tell clients the parable of the Turkey.

[quote]Every day the turkey gets fed a handful of grain by the farmer. Some days he gets a little more and some days a little less, but in general as he grew bigger he got more grain each day. He was a very fat and happy turkey, content with life. Then came November 24th. [/quote]

So don't read too much into past performance as it can tell you very little about the future, sometimes.

The best we can do is to say that in the past equity returns have been X +/- s, bond returns have been X +/- s, other assets have been X +/- s etc. And when combined into a diversified portfolio, the total risk goes down.

As for dividends, they are when as and if declared, while interest payments are a little more deterministic


[/quote]

Does your narrow mind really not get it? Your little theory is not relevant. Clients get bored when you explain that technical sh*t. They don't care. If you show a client two sets of returns, they will choose the higher one, every time. Do you think I'm bullsh*tting about closing deals by showing statements? THAT is the information that they want in order to make a decision.

I suggest you take a course in human nature. Clearly it's beyond your limited comprehension. Plus, you're an a$$hole.

[quote=anonymous]

I promise to meet face to face with my clients at least 3 times a year for indepth portfolio reviews and contact

Dust Bunny, I hope that your clients are all high networth and are all in fee-based accounts. 

[/quote]

All high net worth, yes.  My average account size is in the high 6 figures to low 7 figures.  Even though I promise to meet with my clients that often, most of the time they don't want to come in or are traveling and we do phone conferences.   In fact, half the time I have to literally force them to do so because they say everything is just fine. 

I'm switching some to fee based when I get the 65 at the end of June. Some will be part commission and fee based and some lols (little ole ladies with bond portfolios only) will probably still be comission.  At least that's how I see my business transitioning.

[quote=AllREIT]
I don't even use hypo's. I tell people that past performance isn't very useful except for getting a flawed sense of potential future returns. I tell clients the parable of the Turkey.
[/quote]

You've GOT to be kidding right?  You're not really this stupid.  This explains why it's so easy to ACAT accounts away from other brokers.  So I suppose that comparing the performance of a mutual fund to the S&P 500 with emphasis on the standard deviation isn't useful to you either?  Do you pick funds by throwing darts?

[quote=Philo Kvetch]Not every month. Every quarter. Sorry, my mistake.

Look, I'm not being confrontational. But follow me on this:

First of all, we're ALL one correction away from an arbitration. Agreed?
Good. Now picture this.

Client's Attorney- Now Ms Bunny, did you show my client this
hypothetical, which was compliance approved, of course?

DB-Why yes I did.

Atty-Is it the same today as it was nine months ago when you showed it
to my client?

DB-Well, no, I update it every quarter

Atty-I see. Did you make my client aware of the changes to your
recommendations when you made them?

DB-No, I didn't.

Atty-And why not, Ms Bunny?

DB-Well, it wasn't necessary.

Atty-I see Ms. Bunny...you have my client's money so there's no further
need to concern yourself with the cilent's well-being.

And so forth, and so on. You get the idea.

In answer to your question, I very rarely use mutual funds, so hypos, at
least for me, are a non-issue.[/quote]

Wow, you do have a real reading comprehension problem!! I hope you listen to your clients better than you read.  Where did I say that the package was anything to do with any recommendations that I would make in a client's account or that I make blanket recomendations to my clients based on hypos.  

Let me type sloooowwwwly.   It is a pre approach packet to show to prospects, using a real account (one of my 7 figure ones) that shows real statements with the accompanying analysis pages so the prospect can get an idea of how I analyize and review their accounts.  If the packet also happens to show perfformance that is incidental.  The reason I update it is because who would trust me if I showed them a portfolio snapshot and analysis from last year?

Your contention that you can't or shouldn't show a client or prospect a historical statement or hypothetical is just ridiculous.  As long as you aren't selling based on guaranteeing previous performance as future performance you are perfectly able to bring up the past performance.  In fact you should do so, in order to make references to how an investment might be affected by current conditions compared to those in the past.

Would you go to a car dealer and buy a car where the salesman won't give you any information about gas mileage performance, repair and break down statistics, warranties, options availble.  He just says buy this.....trust me.....I'm a professional car salesman so I know best.    I sure wouldn't.

[quote=Dust Bunny][quote=anonymous]

I promise to meet face to face with my clients at least 3 times a year for indepth portfolio reviews and contact

Dust Bunny, I hope that your clients are all high networth and are all in fee-based accounts. 

[/quote]

All high net worth, yes.  My average account size is in the high 6 figures to low 7 figures.  Even though I promise to meet with my clients that often, most of the time they don't want to come in or are traveling and we do phone conferences.   In fact, half the time I have to literally force them to do so because they say everything is just fine. 

I'm switching some to fee based when I get the 65 at the end of June. Some will be part commission and fee based and some lols (little ole ladies with bond portfolios only) will probably still be comission.  At least that's how I see my business transitioning.

[/quote]

An average is one number, not a range of numbers.

It's a moving average

It’s a moving average

I'm not lying.  I've been in the business for 18 years and will probably be retiring in about 5.  Many of my clients have been with me for that length of time and have multiple accounts within the same household as well as corporate and retirement plans. I don't sell performance.(although my performance over the years has been pretty good). I sell service which is what the packet is all about.    I also don't prospect very much because I don't need to. My clients refer to their families and friends to me and my husband hand-grooms his clients from his separate business. I have enough clients to more than keep me busy. 

I am getting the series 65 to be able to have a more attractive business with fee based income, to sell when the time comes to transition to retirement, as well as the fact that some of my clients have stated a desire to do some fee based account trading.

Don't take my advice if you don't want to, (I don't care), but realize that every one's business is different at different stages of their lives and length in business as well as the demographics of their areas.

Moving average is a joke with Bobby. You do know what a moving average is? 

[quote=Reggin][quote=AllREIT]I don’t even use hypo’s. I tell people
that past performance isn’t very useful except for getting a flawed
sense of potential future returns. I tell clients the parable of the
Turkey. [/quote]

You've GOT to be kidding right?  You're not really this stupid.  This explains why it's so easy to ACAT accounts away from other brokers.

  So I suppose that comparing the performance of a mutual fund to the S&P 500 with emphasis on the standard deviation isn't useful to you either?  Do you pick funds by throwing darts?

Great post, Allreit.

I suggest you take a course in human nature. Clearly it's beyond your limited comprehension. Plus, you're an a$$hole.

Bobby, little dick, big mouth.

[quote=crashcourse]

Great post, Allreit.

I suggest you take a course in human nature. Clearly it's beyond your limited comprehension. Plus, you're an a$$hole.

Bobby, little dick, big mouth.

[/quote]

Wow!  I'm really starting to like this dude.

[quote=Dust Bunny]

I’m not lying. I’ve been in the business for 18

years and will probably be retiring in about 5. Many of my clients have

been with me for that length of time and have multiple accounts within

the same household as well as corporate and retirement plans. I don’t sell

performance.(although my performance over the years has been pretty

good). I sell service which is what the packet is all about. I also don’t

prospect very much because I don’t need to. My clients refer to their

families and friends to me and my husband hand-grooms his clients from

his separate business. I have enough clients to more than keep me

busy.

I am getting the series 65 to be able to have a more attractive business

with fee based income, to sell when the time comes to transition to

retirement, as well as the fact that some of my clients have stated a desire

to do some fee based account trading.

Don’t take my advice if you don’t want to, (I don’t care), but realize that

every one’s business is different at different stages of their lives and

length in business as well as the demographics of their areas.

Moving average is a joke with Bobby. You do know what a moving

average is?

Personally, I've chosen to not be a mutual fund hack.

With all due respect.......(which generally means really with none) you don't have a clue.  STFU

[quote=Dust Bunny]

Personally, I've chosen to not be a mutual fund hack.

With all due respect.......(which generally means really with none) you don't have a clue.  STFU

[/quote]

LOL...Judging by what you've posted, I've already forgotten more about this business than you'll ever know.

So 'long, hack.  See you in the funny papers.

A major broker dealer's internal study shows that the majority of advisor managed wrap accounts - using managed mutual funds - these accounts underperform their indexes. The performance, wrap fee, account activity level, apparent financial advice being given ( or not) on the accounts, all of this is of interest to regulators, and could represent a potential compliance or regulatory or class action lawsuit lightening rod. The fee has to be justified.

We all know the facts about the performance of managed funds vs. indexes. We also know that in the managed fund world, winners - index beaters - tend to run, and losers tend to run.

Index or managed, the question comes back to one of value received for compensation paid by the client. Those advisors who take the trouble to sharpen financial planning skills and deliver value ( and document service and advice), serve the best interst of the client, and work for the long term, these advisors appear to be on firm ground.

Philo, Bunny…whoa…you are both fine advisors in my book…different approaches, but fine advisors.  Can’t you just agree that there are different ways to skin the cat and lay down your swords?

[quote=crashcourse]

A major broker dealer's internal study shows that the majority of advisor managed wrap accounts - using managed mutual funds - these accounts underperform their indexes. The performance, wrap fee, account activity level, apparent financial advice being given ( or not) on the accounts, all of this is of interest to regulators, and could represent a potential compliance or regulatory or class action lawsuit lightening rod. The fee has to be justified.[/quote]

when referencing studies, it lends credibility to actually provide the name and authors of said study, IMO.

I know that my wraps using managed open-end mutual funds have consistently beat their i-share counterparts (both in lower std dev. and much higher returns). 

So how does the advisor justify using a wrap, with a 1% fee, and investing in all etf's or index funds?  Do they disclose to the client that they have just guaranteed index underperformance?

[QUOTE]

So how does the advisor justify using a wrap, with a 1% fee, and investing in all etf's or index funds?  Do they disclose to the client that they have just guaranteed index underperformance?

[/quote]

How does an advisor charge a commission to just hand the money over to someone else?

Next up! Get your mutual funds here...

[quote=EDJ to RIA]

[QUOTE]

So how does the advisor justify using a wrap, with a 1% fee, and investing in all etf's or index funds?  Do they disclose to the client that they have just guaranteed index underperformance?

[/quote]

How does an advisor charge a commission to just hand the money over to someone else?

Next up! Get your mutual funds here...

[/quote]

Has anyone noticed that fee advisors HATE commission advisors, but the commission guys could care less? Personally, the broker meter is one of the best things to happen to my business. I wish more people would use that compensation model. "The first thing we're gonna do is turn off those EXTRA fees."